I always see watches and think they're really cool looking, but have only gotten close to dropping some real money once. (not counting the Cartier I bought for my wife which she returned, lol).
I don't begrudge anyone who actually does though, and it's true they appreciate in value. In fact, I have a friend who was flipping watches he found off ebay for awhile - he'd purchase a Rolex that he felt was undervalued, wear it for a few months, the sell it off for a few hundred bucks extra. There's definitely a market out there.
For me, personally, I'd just prefer to spend the money elsewhere. But damn, some of those watches look bad ass. Especially the black and red/orange tach watches that have been popping up everywhere.